4 Key Priorities for ACO Success: People, Process, Technology & Financials

4 Key Priorities for ACO Success

People, Process, Technology and Financials

Doris SteinHealthcare Partner

Optimity AdvisorsDoris, with over 20 years of consulting and industry experience, leads the government programs practice for Optimity Advisors and is a frequent industry speaker about ACOs. Most recently, she presented at the European Health Conference and the ACO Southeast Regional Conference.

April 30, 2015 INFORM | TRANSFORM | OUTPERFORM Page | 2

Dennis R. HorriganPresident and Chief Executive Officer

Catholic Medical PartnersDennis and his management team at Catholic Medical Partners are

managing over $1 billion in healthcare expenditures using a

population health/business model. CMP was one of the top

performing Shared Saving Accountable Care Organization (ACO) in

the country.

Presenters:

• ACO Network Options

• ACO Maturity Model

• Integrated Care System

• Examples Contributing to ACO Success:

o People

o Process

o Technology

o Financials

• Managing Risk & Margin

• Catholic Medical Partners (CMP) case study

• Questions?


Agenda

ACO Network Options

• Physician Group Structure

• Physician – Hospital Network (Independent & Employed)

• Physician – Hospital Network (Employed Only)

• Academic Medical Center Network

• Fully integrated – Physician / Hospital / Insurance

• Health Plan / Physician

• Health Plan / Hospital

• Employer Group/Hospital


* Develop Business Plan

* Leadership/Governance Structure

* Business Partnerships

* Gain Sharing, Benchmarks & Patient Assignment

* Change Management Plan

* Organizational Readiness

* Identify Sponsors/Champions

* Define Health & Wellness Programs

* Define Cost and Utilization Benchmarks for Local Market

* Define Reporting Requirements -Financial, Clinical, Operations, Compliance

* Define Enterprise Architecture -Business, Operations, Systems, Data

* Establish Real-time Feedback

* Evaluate Clinical Strategy

* Conduct regular Stakeholder Meetings

* Enterprise Dashboards

* Report to Internal ACO Stakeholders and Patients

* Trend & Predictive Analyses

ACO Maturity Model

0-9 MonthsAssess & Plan

9-18 MonthsImplement & Sustain

18-36 MonthsMonitor, Evaluate & GrowKey Activities and Milestones Across the ACO Lifecycle



Integrated Care System

Member

• Integrated Data Reporting

• Provider/ Payment System Integration

• Patient Accessibility Member Portal

• Electronic Heath Records

• Cost Reporting

• Aligned Incentives

• Pay for Performance Modeling

• Capital Budget Planning

• Governance

• Communication

• Culture Change Management

• Human Capital Management

Process

• Quality Reporting

• Clinical Integration

• Population Focus

• Health and Wellness

• Care Management

Primary Care

CommunityCare

AcuteCare

Behavioural/Social Support

People Process

Financials Technology

Examples Contributing to ACO Success - People

• People

People

• Culture/Change Management

• Communication Plan

• Organizational/Governance Structure

• Human Capital Management

• Recruitment, Training & Development

• Physician Incentive Plan

• Performance Monitoring

• Catastrophic Patient Management

• ACO Steering Committee provides oversight and direction, develops policies, and manages implementation

• All provider groups in the ACO are represented in leadership/executive committee with shared accountability

Governance Structure

• Single, consistent physician and contracting strategy across system with appropriate incentive plans

• Physician engagement to change practice patterns (practice in teams, implement EHRs, etc.)

Physician Engagement/P

ayment

• Organization’s culture supports physician alignment and leadership

Culture/Change

Management

• More focused cost-containment strategies in order to control the smaller population that is spending significant expenses

Catastrophic Patient

Management


Examples Contributing to ACO Success - Process

• Marketing & Product Development

• Contracting/Network Management

• Reimbursement

• Value Based Benefits

• Coaching, Health & Wellness Programs

• UM/CM/DM

• Clinical Decision Support Guidelines

• Meaningful Use

• Admission Diversion

• Readmission Reduction

• Expand Primary Care Services

• Nutritionist

• Care Coordinators

• Nurse Practitioners

• Encouraging patients to take an active role in care through shared decision making and communication about self-management, medications and change in lifestyle

Health and Wellness

• Directing physicians to highest risk patients and to weightiest quality measures for a Phase 1

• Developing goals for admission diversion and readmission reduction

Focused Goals

• Care Delivery model "integrates" services from Health & Wellness to Disease/Case Management

Care Delivery

• Referral patterns must be monitored

• Assignment of patient populations and movement in and out of network must be monitored

Network Management


Process

Examples Contributing to ACO Success - Technology

• Connect EHRs across organizations (hospitals, providers, etc.)

• Hire technology support staff to maintain functionality of EHR system

EHR

• Enterprise reporting addresses individual & population and financial & clinical data

• Standardized reporting metrics across all providersReporting

• Data strategy and information sharing is owned by all participants Data Strategy

• Can track compliance and performance against contractual quality goals and published guidelines – by patient, provider or practice

System Tracking

• Interoperable IT Systems

• EHR

• PHR

• Patient Portals

• Advanced Care Management Systems

• Care Transition Electronic Plans/Monitoring

• Enterprise Reporting Systems

• Clinical, Financial & Operational

• Decision Support

• Predictive Modeling

• Workflow/Automated Triggers


Technology

Examples Contributing to ACO Success - Financial

• Financial model offers returns required to support investment and ensure financial goals

• Understanding how market and population impact utilization and capacity to help define financial forecasts around resources, capital and costs

Financial and Capacity Planning

• Populations are monitored directly against contracts, to get every dollar available by closing gaps in care

Pay for Performance

• Understanding of total medical expenditure and cost drivers across the population of patients

• Moving some care to lower cost sites of service (e.g., ambulatory clinics versus hospitals)

Total Medical Expenditures

• Incentive model must account for geographic variability and demographic risk

• Model is based on meeting cost targets, quality targets and efficiencies

Physician Incentive

Model

Financial

• Cost Reporting

• Actuary

• Gains Sharing/Revenue Model

• Capital Budget Planning

• Pay-for-Performance Modeling

• Competitive Cost Benchmarking


Managing Risk and Margin

Risk Performance+

+

In-network utilizationMarket Share growth (new patients)

Excellent Expense Management

Market Share loss Poor expense management

Increased volume comesfrom excess utilization in higher

cost settings

Preventable Admissions (PQI)30 Day Readmissions

Care in “Lowest cost setting”

Population Health

Op

era

tin

g M

argi

n

Fee for Service


Catholic Medical Partners Path to Clinical Integration (CI)

Registry Program/ Align Clinical

Integration Between Physicians and the

Health System

EHR Adoption, Reporting

& InteroperabilityMeaningful Use

Embedded Care Coordination / Care

Transitions

NCQA AccreditationPatient Centered

Medical Home

High Performing Health Care System


CI E

volu

tio

n


CI Mitigates Incentive Disconnect Between Fee-For-Service, ACO Reimbursement

Source: The Advisory Board

Utilization

• Prevent unnecessary inpatient admissions

• Minimize inappropriate or duplicative care delivery

• Refer patients to most appropriate and efficient specialists, sites of care

Expense Management

• Create and follow evidence-based care pathways

• Streamline costs through adherence to standards

• Develop economies of scale across continuum for all growth service lines

Clinical Outcomes

• Minimize preventable readmissions

• Proactively manage chronic illness to prevent low-margin inpatient utilization

• Promote community wellness for at-risk populations

Physician Assistance Key to Achieving ACO Objectives


Source: The Advisory Board

Trends in Expenditures per capita Benchmark Year 3 to Performance Year 1

10,470

11630

8,844

10388

10810

7819

4,000

6,000

8,000

10,000

12,000

All ACOs Shared Savings CMP ACO

Exp

en

dit

ure

s

Per Capita Expenditures

Benchmark Year 3

Performance Year 1

-6.21% reduction

-13.45% reduction

Avg of 58 ACOsAvg 220 ACOs


Trends in Expenditures- Average percentage change in Inpatient and other components Benchmark Year 3 to Performance Year 1

• Inpatient expenditures dropped for ACOs

with shared savings.

• ACOs that received shared savings showed

its largest reduction in expenditures in the

following categories:

o DME Expenditures

o Skilled nursing facilities

-19.84%

-12.95%

-9.48%

-45.33%

-14.39%

-17.88%

DME Expenditures

Inpatient and Other Component Expenditures

CMP ACO Other ACOs w/Shared Savings

InpatientExpenditures

Skillednursing facilities


Trends in Utilization - Average percent change in hospital and other utilization categories Benchmark Year 3 to Performance Year 1

• ACOs that received shared savings (and

were in the top 25 quartile for percent

changes) showed its largest reduction

in utilization in the following

categories:

o ED visits leading to

hospitalizations

o Hospitalizations

o 30 day readmissions

o SNF discharges (**not provided

data until Jan 2014)-6.99%

-12.06%

-11.16%

-21.00%

-22.00%

-28.00%

Hospitalizations

Utilization Categories

CMP ACO Other ACOs w/Shared Savings

ED visits led to hospitalizations

30 dayreadmissions


Performance Year 1 Challenging Measures

CMP ACO exceeded the average by 28% for the diabetes composite measure.

ACO’s, on average, experienced challenges with mean performance rate falling below 50% related to measures for the Diabetes population, Falls Risk and Depression screening.


Performance Year 1 Room for Improvement Measures

CMP, ACO out performed other ACOs (on average) in reducing all condition admissions and admissions for

patients with COPD/Asthma, but there is room to improve for admissions related to HF.


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Questions?